Restrictive trade barriers are another reactive reason why companies often switch from exporting to overseas manufacturing. Barriers such as tariffs, quotas, buy- local policies, and other restrictive trade practices can make exports to foreign markets too expensive and too impractical to be competitive. Many firms, for example, want to gain a foothold in Europe - to be regarded as an insider - to counteract trade barriers and restrictions on non-EU firms (discussed further in the Comparative Management in Focus at the end of this chapter). In part, this fear of “Fortress Europe” is caused by actions such as the EU's block exemption for the franchise industry. This exemption prohibits a franchisor, say McDonald's, from contracting with a single cQmpany, say Coca-Cola, to supply all its franchisees, as it does in the United States.
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